Tag Archive: "Partnership Agreement"
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Year-End Reminders for Fund Managers
As year-end approaches, fund managers should prepare for compliance season by working closely with their service providers to ensure delivery dates are met and potential hurdles are anticipated. We recommend that fund managers consider the following: Have open and honest conversations. Engage your fund administration, tax, and assurance teams to set expectations and establish […]
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Deficit Restoration Obligations in Partnership Agreements
In last week’s blog post, we shared two concepts that are essential to understanding partnership allocations under Internal Revenue Code (IRC) Section 704. While last week’s blog post focused on the role of Substantial Economic Effect in partnership agreements, today’s blog post will stress the importance of Deficit Restoration Obligations (DROs) in partnership agreements. DROs […]
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Understanding Substantial Economic Effect in Partnership Agreements
Partnerships provide a valuable framework for collaboration in business, but navigating the tax implications of partnership agreements can be complex. One critical, yet often overlooked concept, is the determination of a partner’s distributive share of allocable partnership items, which is covered under Internal Revenue Code (IRC) Section 704. Under IRC Section 704(b), if a partnership […]
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How the Language in a Partnership (or Operating) Agreement Can Have a Significant Impact on Fund Administration
Often 60 to 100 pages and thousands of words, partnership or operating agreements (“LPAs”) act as the legally binding agreement between the sponsor (“GP”) of a fund and its investors, the limited partners (“LPs”). From an administrator’s perspective, LPAs are the roadmap for a fund’s life cycle; from formation, through investor onboarding and mechanics for […]